Dairiboard Holdings (Private) Limited v Benson Samudzimu

### Preamble
Judgment No. SC 109/20
1
Civil Appeal No.SC 212/19
REPORTABLE
(101)
---------


REPORTABLE	(101)

DAIRIBOARD     HOLDINGS     (PRIVATE)     LIMITED

v

BENSON     SAMUDZIMU

SUPREME COURT OF ZIMBABWE

UCHENA JA, MATHONSI JA & CHITAKUNYE AJA

HARARE: JUNE 8, 2020 & JULY 28, 2020

T. Mpofu, for the appellant.

A. Chagudumba, for the respondent.

MATHONSI JA:	 This is an appeal against the whole judgment of the Labour Court delivered on 23 February 2018 which dismissed, with costs, an appeal by the appellant against an arbitral award issued on 8 February 2010.

BACKGROUND FACTS

The appellant employed the respondent initially as Regional Engineer in February 1993.  He rose through the ranks to become the Managing Director of Dairiboard Zimbabwe (Private) Limited, one of the appellant’s subsidiaries, in 2006.  In February 2009, he was transferred laterally to the position of Business Development Director.  During the course of that year, a routine internal audit was carried out within the institution.

Adverse findings were made against the respondent in the audit report which led to him being charged with four counts of misconduct in terms of the appellant’s Code of Conduct.  In the first charge, the respondent was accused of misuse of company property in breach of s 29:19 of the Code of Conduct.  The allegations were that although the respondent was, in terms of his employment contract, entitled to the use of two motor vehicles, he had proceeded to access three more vehicles which he used without appropriate authority.  In using those vehicles without authority, the respondent had allegedly failed to keep vehicle log books as required by the company’s motor vehicle policy.

In count two, the respondent was charged with dishonesty, in breach of s 29:25 (a) of the Code of Conduct.  The allegations were that while he was entitled, in terms of his contract of employment, to 400 litres fuel allocation per month and an additional 150 litres to purchase, he had consumed far in excess of that allocation.

Regarding count three, the respondent was charged with dishonesty in breach of s 29:25 (d) of the Code.  He was accused of applying or attempting to apply assets of the company to wrong use.  This related to the allegation that he purchased fuel from the company for private use when the policy was that the monthly purchases were meant to subsidise usage of fuel from home to the office after the monthly allocations had been reduced.

In respect of count four, he was charged with falsification in breach of s 29:21 of the Code it being alleged that he had falsified his leave record in that, although he had proceeded on leave on various occasions between 2007 and 2009, he had not submitted leave forms to the Finance Director for deduction from outstanding leave days.  Instead, the respondent allegedly tried to claim all the leave days as if he had not gone on leave.

Count five relates to obtaining property or money or an advantage through the use of a misrepresentation in violation of section 29:25 (f) of the Code.  The allegation was that he had issued two cheques on 3 and 4 January 2008 in favour of the appellant on behalf of a company known as Harepack Trading (Private) Limited.  The two cheques were subsequently referred to drawer by his bank.

The disciplinary hearing could not be conducted within the prescribed period of 30 days as provided for in the Code of Conduct.  As a result, the matter was referred to a Labour Officer in terms of s 101 (6) of the Labour Act [Chapter 28:01] for conciliation.   A certificate of no settlement was issued resulting in the matter being referred to compulsory arbitration.  After some haggling over the propriety of the initial referral to arbitration, the arbitration proceedings were eventually conducted by Arbitrator Manase in January 2010.

THE ARBITRATOR’S FINDINGS

Although the appellant is the only party to have led viva voce evidence before the arbitrator, the respondent having elected to rely only on documentary evidence and submissions by counsel, the arbitrator promptly rejected the viva voce evidence of the appellant’s witness.  He found that the witness, Anthony Mandiwanza, “was evasive although not out-rightly falsifying evidence.”  His evidence was found to be unreliable.

The arbitrator found that none of the charges had been proved.  On count one, relating to the alleged misuse of motor vehicles, the arbitrator concluded that the vehicles were used for verifiable business purposes.  As senior management, the respondent had “managerial discretion” on how to use the company vehicles.  Although proof of proper use of the vehicles could easily be evidenced by the logbooks which the respondent was required to complete, the arbitrator embraced the respondent’s explanation that he could not produce the logbooks because they were left in his office upon his suspension.  According to the arbitrator, the appellant did not insist on respondent being escorted to the office to access the logbooks.

On count two, involving the alleged dishonesty of drawing more fuel than he was entitled to, the arbitrator found that the employment contract allowed the respondent 500 litres of fuel per month.  According to the arbitrator the letter advising the respondent of the reduction of his allocation to 400 litres per month was “of dubious legality given its unilateral character.”  As the fuel was “openly drawn and signed for,” no offence was committed.

Count three on the dishonesty of purchasing fuel for private use, the arbitrator found that as the subsidised fuel was sold to the respondent, it no longer belonged to the appellant.  For that reason, the respondent was at liberty to use his fuel as he pleased.  So ended that charge.

The charge of falsifying leave days (count four) was dismissed as “there was no falsification or recording of incorrect information because the true facts were quickly ascertained.”  In the arbitrator’s view, the respondent could not be “penalised for submitting the wrong number of days.”  The charge was therefore not sustainable.

The fifth charge relating to misrepresentation arising from the two dishonoured cheques, the arbitrator took note of the fact that the respondent had made good the values of the cheques by paying cash in ten days’ time.  In dismissing the charge the arbitrator remarked;

“I am of the view that the claimant (the appellant herein) should have established from the bank that there was no such error and letter as alleged.  Further the delay in taking action in this matter seems inordinate.  I am convinced that claimant had by its action waived its right to take action on this count.  Indeed it is clear that this matter (January 2008) was water under the bridge and, was only resuscitated for these purposes.  This charge is unsustainable.”

I should point out that in respect of the cheques, the respondent had raised the defence that the cheques were returned because of an error at his bank.  He claimed that the bank had confirmed its error in a letter which he failed to produce.  The arbitrator was of the view that the appellant should have taken the initiative to contact the respondent’s bank inquiring about the alleged error and the existence of the bank letter.

Even though he dismissed the misconduct charges, the arbitrator found that the relationship between the parties had become untenable and counselled against reinstatement.  He authorised the appellant to terminate the employment contract and pay damages for loss of employment.

Both parties were aggrieved.  When the appellant appealed to the Labour Court against the arbitral award, the respondent also cross appealed.  His gripe was with the arbitrator’s finding that the relationship between the parties had become acrimonious and that the appellant was free to terminate employment.

PROCEEDINGS A QUO

The appellant’s case before the court a quo was that the arbitral award ought to be set aside because it was grossly unreasonable and represented an abdication of judicial function.  This was because the appellant had led evidence, which was uncontroverted, to prove all the five charges preferred against the respondent.  On the cross-appeal, the appellant’s position was that it lacked merit by reason that the respondent had already taken up alternative employment elsewhere.  The issue of reinstatement did not arise for that reason.

The respondent defended the arbitral award with all his might.  His position was that the appeal was against the factual findings made by the arbitrator.  There being no misdirection or gross unreasonableness in the factual findings in question, there was no basis for interference.

It was the finding of the court a quo that it could not interfere with the findings of credibility of the appellant’s witness made by the arbitrator.  This was because the record of that evidence had not been availed and also because an appellate court cannot interfere with credibility findings of the court of first instance which had the benefit of observing the performance first hand.  The court a quo then preferred a hands off approach in that regard.

On the charge involving the misuse of motor vehicles the court a quo found that no logbooks were available and that the appellant had “barred the respondent from accessing the office”   where the respondent claimed the logbooks were kept.  The court a quo also upheld the reasoning of the arbitrator that the reduction of the fuel allocation from 500 litres to 400 litres had not been agreed upon between the parties.  For that and related reasons, theft of fuel was not proved and the arbitrator’s conclusion that fuel was openly drawn could not be termed irrational.

The court a quo did not want to be detained by the issue of leave days as it was in agreement with the arbitrator’s finding that there was no allegation that the respondent had taken “unauthorised leave.”  Accordingly the appellant had not established that the respondent had falsified or caused the falsification of records.

On the dishonoured cheques, the court a quo was again not persuaded by the appellant’s evidence.  It rejected the affidavit of Samson Tazvitya to the effect that he had not authorised the issuance of the dishonoured cheques.  The affidavit was rejected because it was prepared 3 days after the arbitration hearing.  What escaped the court a quo’s attention is that additional evidence had been submitted to the arbitrator after the hearing by agreement between the parties and the arbitrator.

Apart from that, the court a quo found no fault with the arbitrator’s insistence that the appellant should have gone to the bank to investigate why the cheques were dishonoured by non-payment.  On that aspect the court a quo pronounced:

“Appellant takes issue with the finding by the arbitrator that it was the appellant who was supposed to find out what happened at the bank.  Whilst the arbitrator’s finding reads thus:

‘I am of the view that the claimant should have established from the bank that there was no such error and letter as alleged.’

It would appear to me to be a slip of the tongue as this statement is inconsistent with what the arbitrator stated at page 18 of the record.  He reasoned thus:

‘I have considered respondent’s evidence in great detail.  I would have preferred that he produced a copy of the letter from the bank regarding its alleged mistake in dishonouring the cheque.’

Having read the two statements I am of the view that it was not his intention to put the onus on the appellant on this score.

The ‘evidence’ on the cheque issue is all muddled up. It does not permit one to arrive at one conclusion.’”

That way, the court a quo upheld the conclusion of the arbitrator that the evidence adduced by the appellant was insufficient to prove the charges on a balance of probabilities.  It also dismissed the cross-appeal by the respondent as the two grounds upon which it was based were without merit.

The appellant remained disgruntled and launched the present appeal on the grounds that follow.

GROUNDS OF APPEAL

The court a quo erred in not coming to the conclusion that the assessment of the appellant’s evidence in the absence of respondent’s counter-evidence was not possible as a matter of law and so erred in coming to the conclusion that the arbitrator properly concluded that appellant’s evidence was unreliable.

The court a quo erred in concluding that the absence of a record of proceedings was a factor to be taken into account in sustaining respondent’s objections at the expense of appellant’s interests and so contradicted itself in making a finding of fact stand under circumstances where there was no evidence to sustain its validity.

The court a quo erred in failing to conclude that the arbitrator had established no basis either in law or in fact for respondent’s use of the pool vehicles.  It so erred in not concluding that the appellant had not, contrary to the arbitrator’s finding, debarred respondent from accessing the logbooks for the vehicles if any ever existed.

The court a quo erred in concluding that the arbitrator properly found that the reduction of respondent’s monthly fuel allocation was unlawful and so erred in concluding that respondent had at any rate excessively exceeded his allocation in the fuel he consumed.

The court a quo erred in not coming to the conclusion that on the evidence that was common cause, the arbitrator had fundamentally misdirected himself in not concluding that respondent had deliberately falsified his employer’s records on the question of leave days and had sought to take advantage of the wrong entries in the records for which he was responsible.

Having accepted as common cause the fact that respondent had sought to pay using a cheque drawn on an unfunded account, the court a quo erred in not concluding that the arbitrator had misdirected himself in not finding that respondent had committed an act of misconduct thereby and no additional onus lay on the appellant to establish anything.

The court a quo erred in going beyond the words used by the arbitrator and assigning to the arbitrator an intention other than that expressed by the words used by him and in doing so without hearing the parties on the matter.

ISSUE FOR DETERMINATION

While the grounds of appeal are many they essentially raise only one issue for determination by this Court.  It is whether or not the court a quo erred in upholding the arbitrator’s findings that the guilt of the respondent had not been proved on a balance of probabilities in respect of all the charges of misconduct.

SUBMISSIONS ON APPEAL

Preliminary point

At the commencement of the hearing of the appeal Mr Chagudumba for the respondent took a preliminary point.  He submitted that the appellant’s ground of appeal number seven violated r 44(1) of this Court’s rules in that it is not clear and concise.  For that reason it ought to be struck out.  Mr Chagudumba further submitted that the remaining six appeal grounds are not on point of law as required by s 92 F (1) of the Labour Act [Chapter 28:01].  Instead the grounds attack the factual findings of the court a quo.

According to Mr Chagudumba, this Court does not have jurisdiction to relate to the grounds of appeal to the extent that they advert to factual issues as opposed to points of law.  Mr Mpofu for the appellant was of a different view.  He defended the grounds of appeal from two fronts.  Firstly, Mr Mpofu submitted that the order of a judge of this Court granting leave to appeal was issued on 29 March 2019 by consent of the respondent.  The same grounds being impugned were accepted by both the respondent and the judge.  The respondent is therefore precluded from objecting to the grounds now.  The jurisdiction of this Court is already entrenched.

Secondly, Mr Mpofu submitted that all the grounds set out in the notice of appeal, speak to points of law.  Where factual findings are attacked, it is on the basis that the findings are so grossly unreasonable that no court properly applying its mind to the issues before it could have made such findings.

I do not intend to be detained unduly by the preliminary objection because I am of the view that the criticism to the grounds should have been made when dealing with the merits of the appeal as opposed to raising it as a preliminary objection.  Prima facie, the grounds of appeal are valid and cannot be struck out without examining the merits.  Indeed, it cannot be said that questions of law do not arise from the grounds of appeal.

In terms of s 92 F (1) of the Act, an appeal on a question of law only shall lie to this Court from any decision of the Labour Court.  What is a question of law has been discussed in a number of cases.  In Reserve Bank of Zimbabwe v Granger and Anor SC 34/01 at pp 5-6 this Court remarked:

“An appeal to this Court is based on the record.  If it is to be related to the facts, there must be an allegation that there has been a misdirection on the facts which is so unreasonable that no sensible person who applied his mind to the facts would have arrived at such a decision.  And a misdirection of fact is either a failure to appreciate a fact at all or a finding of fact that is contrary to the evidence actually presented.  See Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S) at 670 and S v Pillay 1977 (4) SA 531 (Ab) at 535 C-E.”

See also Muzuva v United Bottlers (Private) Limited 1994 (1) ZLR 217 (S); Marunze v Lobels Brothers SC 96/02; Matsuta and Anor v Cagar (Private) Limited SC 47/09.

The authorities show that a misdirection on the facts can mutate to an appealable point of law.  To that extent, the grounds of appeal relied upon by the appellant shall be related to on the merits.  There is no merit in the preliminary objection which is accordingly dismissed.

MERITS

On the merits, Mr Mpofu roundly criticised the findings of the arbitrator and the judgment of the court a quo which upheld the award for holding, inter alia, that evidence led can be defeated by non-evidence.  This is because the viva voce evidence of the appellant was rejected without the respondent having led any contrary evidence.

Mr Mpofu sought to show how the findings of the arbitrator were, in respect of each charge, so grossly unreasonable that they should be vacated.  In his view, the hands off approach preferred by an appellate court in respect of the findings on the facts and credibility by the lower court, cannot be warranted in a case such as the present where the findings in question were grossly unreasonable and ignored clear evidence.

Mr Chagudumba downplayed the respondent’s failure to give viva voce evidence to counter the accusations made by the appellant’s witness.  To him, the respondent was within his rights not to adduce oral evidence.

A finding of credibility can still be made even where the opposing party has not adduced contrary evidence.  In advancing that argument Mr Chaguduma gave the example of absolution from the instance at the close of the plaintiff’s case.  A trial court can grant absolution without hearing the evidence of the defendant.

The main thrust of the respondent’s case is that the arbitrator made factual findings on the evidence presented to it.  He also made findings of credibility after hearing the oral evidence of Anthony Mandiwanza.  The court a quo found no justification for interference with those findings and according to the respondent, this Court should also not interfere because there is no basis for interference.

ANALYSIS

The parties have thrown a lot of issues in argument which have the effect of clouding what is otherwise a clear case.  There is no need to examine in detail all that has been thrown into the fray because the appeal is capable of resolution without that.  Certain findings of fact were made by both the arbitrator and the court a quo.  Is there a basis for interfering with those findings?

It is a well-established tenet of our law that an appellate court is slow to disturb findings of fact made by the trial court.  The appellate court however does interfere where there exists grounds for interference.  In Zinwa v Mwoyounotsva 2015 (1) ZLR 935 (S) at p 940 E-F the established grounds for interference were set out in these words:

“It is settled that an appellate court will not interfere with factual findings made by a lower court unless those findings were grossly unreasonable in the sense that no reasonable tribunal applying its mind to the same facts would have arrived at the same conclusion; or that the court had taken leave of its senses; or, put otherwise, the decision is so outrageous in its defiance of logic that no sensible person who had applied his mind to the question to be decided could have arrived at it; or that the decision was clearly wrong.”

See also Metallon Gold Zimbabwe v Golden Million (Private) Limited SC 12/15.

There is a strong case that is made by the appellant on the manner in which the court a quo assessed the evidence presented to prove the respondent’s guilt or otherwise.  However I do not consider that the frailties of the findings made in respect of counts 1, 2 and 3 reach the threshold required by the authorities, namely gross unreasonableness.

I do not agree that it can properly be concluded, in respect of those charges, that the findings defy logic to an extent that no sensible person who had applied his or her mind to the question to be decided could have arrived at those findings.  I say so because the evidence of misuse of vehicles, theft of fuel and the purchase of subsidised fuel was reasonably rebutted by the respondent.

The same cannot be said about the last two charges of falsifying leave records and misrepresentation arising from the dishonoured cheques.  The case against the respondent on leave days was a simple one.  In fact, before adverse findings were made by the audit team against the respondent, the audit team drew the respondent’s attention to observations it had made and invited his responses.

On the leave days the observation the respondent was requested to address was:

“LEAVE DAYS

It was observed that you had accrued a total of 116 leave days as at end of March 2009.  Could you confirm that indeed you did not take leave since 2004 to this date.”

The background to that was that the respondent had claimed that large number of leave days as if he had not proceeded on leave over those years.  In actual fact, the respondent had gone on leave.  His response to that observation by the audit team is dated 13 May 2009.  He said:

“Leave days

I went on leave from 14-20 April 2009 and from 01 December 2008 to 09 January 2009.  Before that I do not remember exact dates I went on leave, the records would be with Human Resources department to which I respectfully refer you.”

The findings contained in the audit report dated 27 May 2009, which was produced before the court a quo, was that the respondent had accrued a total of 116 leave days with no deductions having been made for leave taken.  According to the audit report:

“Evidence at hand indicates that he was withholding his approved leave forms, and not submitting them for processing on the payroll…………………………….

Evidence at hand indicate(s) he refused to have his leave form(s) sent for process (sic) by PA.  (Leave for Dec 2008 to January 2009) and on email promised to regularise it but at date of audit report 27 May had not done so.”

This is the evidence which was available to the arbitrator and to the court a quo.  It is not easy to appreciate how the arbitrator concluded that there was no falsification or recording of incorrect information.  The court a quo also brushed it aside because it did not want to be detained by the ground of appeal concerning leave days.  To the court a quo, the issue was that the respondent had not taken unauthorised leave.

In fact that was not the issue at all.  The court a quo did not relate to the correct issue or completely misconstrued the issue of leave days.  It was common cause that the respondent had taken leave.  The misconduct arose from withholding approved leave forms from the Finance Director for recording.  This resulted in the record reflecting 116 leave days which the respondent gladly claimed as his.  This record was incorrect due to the respondent’s refusal to have his leave forms submitted for processing.

The finding of the court a quo that the charge was concerned with unauthorised leave was grossly unreasonable.  As a result the court a quo reached a clearly wrong conclusion that the misconduct had not been proved when the record was replete with evidence of impropriety on the part of the respondent.  Ground of appeal number five is clearly meritable.  It accordingly succeeds.

The misdirection regarding the dishonoured cheques is even more glaring.  It is not easy to understand why both the arbitrator and the court a quo struggled with the implications of the dishonoured cheques.  A cheque is defined as a “bill of exchange drawn on a banker payable on demand.” See R. H. Christe, Business Law in Zimbabwe 2ed, Juta and Company Limited at p 212.  The demand referred to in the definition takes the form of a cheque instructing the banker to pay.  The banker will not pay on demand if the customer’s funds are insufficient.

It is for that reason that cheques on unfunded bank accounts are referred to drawer and returned without being honoured.  I agree with Mr Mpofu for the appellant that payment by cheque which is subsequently dishonoured by non-payment is prima facie fraud.  The situation is worse in circumstances such as obtained at the appellant’s business where various employees had been dismissed, even by the respondent himself, for issuing dishonoured cheques.  The policy was that authority was required before payment by cheque could be made.  It was not given.

I have already shown how both the arbitrator and the court a quo shifted the onus of explaining the cheques to the appellant.  The respondent’s cheques were dishonoured.  When that happened, the respondent decided to replace the cheques by cash.  It took him 10 days to make good the value of the cheques.  On being charged, he gave an explanation that there was a mistake at his bank.  It is a celebrated principle of our law that he or she who alleges must prove.  See Nyahondo v Hokonya and Others 1997 (2) ZLR 457 (S) at 459.  There is no way it was the business of the appellant to engage the respondent’s bank on his cheques.  This was a glaring misdirection.

That is not all.  The court a quo also accepted the arbitrator’s finding that the respondent is taken to have waived its right to prefer a charge on the dishonoured cheques by delaying to do so.  The charge was brought within the prescriptive period.  There is nothing in law barring the employer from preferring a charge against an employee which has not prescribed.  It should also be appreciated that charges arose following an audit which was conducted and made adverse findings against the respondent.

The sixth ground of appeal must succeed.  The respondent committed an act of misconduct by transacting with the appellant on the strength of cheques issued on an unfunded account.  By so doing his company or himself obtained the benefit of goods by misrepresentation.  That was not the first time the respondent had fallen foul of that provision in the code of conduct.

The two acts of misconduct the respondent is guilty of entitled the appellant to dismiss him from employment.  Regarding the issue of costs, the appellant raised seven grounds of appeal.  Only two have been upheld.  This is a case in which each party should bear its own costs.

In the result, it is ordered that:

The appeal succeeds with each party bearing its own costs.

The judgment of the court a quo is set aside in respect of paragraphs 1, 3 and 4 and substituted with the following:

“(a)The main appeal is allowed with each party bearing its own costs.

(b)The arbitral award of A. Manase dated 8 February 2010 be and is hereby set aside and substituted with an award that the employee is guilty of charges 4 and 5 of misconduct.”

UCHENA JA				:		I agree

CHITAKUNYE AJA		:		I agree

Dube, Manikai & Hwacha, appellant’s legal practitioners

Atherstone & Cook, respondent’s legal practitioners